Czech economic growth in the 3rd quarter has slowed to 2.5 percent
year-on-year, according to data released by the Czech Statistics Office.
Compared to the 2nd quarter GDP rose by 0.4 percent.
Analysts say this confirms the predicted slow-down in economic growth, although compared to the situation in Germany, the Czech Republic’s main export destination, the Czech figures are still viewed as positive.
Economic growth in 2018 reached 2.9 percent and the prediction for this year is 2.5 percent.
The European Commission on Thursday revised its outlook for Czech economic
growth for this year. In the newly released macro-economic forecast it sees
the country’s gross domestic product growth falling to 2.5 percent.
The report expects growth next year to reach 2.2 percent. Earlier this year it predicted a figure of 2.5 percent for 2020.
The Czech Republic is now ahead of Spain in terms of GDP per capita adjusted to purchasing power parity (PPP). At least according to the latest OECD data, which show the country ranked 27th among the organisation’s 36 member states, with Spain one place behind, news site Aktuálně reports. However, the country still ranks bellow the EU average.
The international rating agency Moody's Investors Service has
downgraded its outlook for the Czech banking sector from positive to
stable. The change is mainly due to the slowdown in the country’s
economic growth, the Czech News Agency reports. Moody’s said on Monday
that after years of rapid loan growth, it expects a slight deterioration in
the quality of its loan portfolio in the Czech Republic.
The New York-based bond credit rating business continues to see the country’s credit rating as one of the best in Central and Eastern Europe, but it expects Czech GDP growth to decelerate from last year’s 2.9 percent to 2.7 percent this year, with a further 0.2 percent decrease in 2020.
Trust in the Czech economy experienced a slight increase in August according to the results of a monthly survey conducted by the Czech Statistics Office released on Monday. The rise is particularly thanks to greater optimism in the trade and services sectors. However, industry trust remains at a six year low and consumer trust has decreased.
Overall confidence in the Czech economy rose slightly to 95.6 in August
from 95.1 in July, according to the Czech Statistical Office.
Among Entrepreneurs, confidence increased by 0.8 points to 93.6 points, the lowest level in five years for the month of July.
Consumer confidence fell to 105.1 points in August from 106.4 the previous month, thus returning to levels recorded in May and June.
In annual terms, both consumer and business confidence is lower than in August 2018
Another long-term drought could cost the Czech economy up to 80 billion crowns, equivalent to a drop of 1.6 percentage points in GDP, according to a new study. Researchers at the University of Life Sciences warn that in order to conserve water for essential use, key industries would be forced to cut production, adding an exponential ripple effect to the surface-level economic impact.
New research by scientists from the Water, Soil and Landscape Centre at the
Czech University of Life Sciences suggests that another long-term spell of
drought would result in an CZK 80 billion contraction of the Czech economy.
Aside from financial effects, drought would also have an impact on
population health and the environment. At a press conference on Wednesday
the team suggested spending CZK 25 billion annually on preventative
Researchers presented two scenarios of how the economy could be impacted by further droughts.
One scenario envisions a 25 percent decrease in the productivity of industries, such as textile or paper production, which are dependent on water supplies. In this case the economy would face a production capability decline between 0.9 to 1.6 percent of GDP.
The second scenario, counts on a 50 percent decrease that would cut production down by 2.8 to 4.8 percent of GDP.
The Czech economy is expected to grow by 2.6 percent this year, following a
3 percent expansion in 2018, according to the latest forecast from
For the coming year, the European Commission foresees growth of 2.5 percent, again mainly fuelled by solid growth in household consumption, with investment growth expected to ‘normalise’.
Private consumption is likely to remain the main growth driver and should continue to benefit from swift growth in wages and pension incomes, and robust consumer confidence, the EC said.
The trade balance is set to deteriorate over the forecast horizon and detract from GDP growth in 2019, before turning neutral in 2020, the forecast says.
The Czech Republic’s economic growth is expected to continue at a rate of around 2.5 percent, the International Monetary Fund predicted in a press release on Thursday. Inflation is expected to go down and unemployment levels will rise. The head of the organisation also warned of the large impact that American tolls on European products would have on the Czech economy.